Granite Properties has acquired the three-building Eldridge Place office complex for $78.4 million, a show of confidence by an established Texas company that’s familiar with Houston’s boom-and-bust real estate cycles. less

Granite Properties has acquired the three-building Eldridge Place office complex for $78.4 million, a show of confidence by an established Texas company that’s familiar with Houston’s boom-and-bust real ... more

Photo: NA, Behringer Harvard

Photo: NA, Behringer Harvard

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Granite Properties has acquired the three-building Eldridge Place office complex for $78.4 million, a show of confidence by an established Texas company that’s familiar with Houston’s boom-and-bust real estate cycles. less

Granite Properties has acquired the three-building Eldridge Place office complex for $78.4 million, a show of confidence by an established Texas company that’s familiar with Houston’s boom-and-bust real ... more

Granite Properties has acquired the three-building Eldridge Place office complex for $78.4 million, a show of confidence by an established Texas company that’s familiar with Houston’s boom-and-bust real estate cycles.

“A large part of our M.O. has been to take advantage of recovering real estate markets,” said Scott Martin, Granite’s executive managing director. “As we see Houston bottoming, we see it as a great opportunity.”

Dallas-based Granite purchased the 824,632-square-foot complex from TIER REIT, also of Dallas. The buildings at 737, 757 and 777 N. Eldridge Parkway are each between 60 and 80 percent leased. They were built in 1984, 1986 and 2009.

The price paid by Granite reflects its opportunistic approach. The buildings, which flooded during Hurricane Harvey, are in a west Houston office market that appears to be hitting bottom after several years of distress in the wake of the oil price collapse. At the end of last year, the Energy Corridor vacancy rate, including sublease space, was 26 percent, according to CBRE. Vacancy across the greater Houston area was 22 percent.

TIER REIT’s predecessor, Behringer Harvard, bought Eldridge One and Two in 2006 for about $101 million and later developed Eldridge Three. In a statement issued Thursday afternoon, the real estate investment trust said it expected to receive additional insurance proceeds related to the loss and damage from Hurricane Harvey, including a claim for the loss in value.

The complex has been undergoing $20.6 million in improvements, including renovating the lobbies and raising the electrical system to protect the properties from future floods.

“They’ve been recently renovated, so really the only risk from our perspective is the lease-up risk, and we have enough faith and confidence in Houston and our history here that we see it as a great investment,” Martin said.

The complex has more than 600,000 square feet that will become available in the coming five years as tenants McDermott International and BP Lower 48 consolidate their offices in other properties.

Privately-held Granite Properties has offices in Dallas, Houston, Atlanta, Denver and Southern California and has completed more than $6.8 billion in real estate transactions since its founding in 1991. With this acquisition, the company’s Houston portfolio expands to more than 2.3 million square feet.